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Research Notes & Special Studies by the Historian's Office

Research Note #23Luther Gulick Memorandum re: Famous FDR Quote

Franklin Roosevelt made a famous remark about the Social Security
payroll tax, to the effect that he designed Social Security to use
a payroll tax so "no damn politician can ever scrap my social
security program." The quote is well-known and much-used, but
its origins have been somewhat unclear.

This quote was published for the first time in 1958 in volume 2
of the first edition of Arthur Schlesinger Jr.’s history of
the presidency of Franklin Roosevelt (The Coming of the New Deal).
Unfortunately, Schlesinger’s original commentary on this created
some confusion, as he talked about several separate topics in the
same paragraph, and in the sourcing footnote he cites five sources
to the various topics, without making clear which citation is to
which topic. (Cf. The Coming of the New Deal, pg. 308-309.)
Since Rexford Tugwell and Frances Perkins were also mentioned in
the same paragraph, some scholars assumed the quote was being attributed
to one of them. But in fact, the quote comes from Luther Gulick.
The memorandum reproduced in full below is the source document for
this quotation. It is a "memorandum for the file" written
by Gulick sometime in the summer of 1941. A copy of the Gulick memo
is in the FDR Presidential Library in Hyde Park, NY and this reproduction
is courtesy of the FDR Library.

The memorandum is largely self-explanatory.

Who Was Luther Gulick?

Luther Gulick was not an important New Deal figure. In fact,
he had no official position in the Roosevelt Administration,
other than as an appointee to ad-hoc advisory groups like
the one referred to in the memorandum.

Gulick was an expert on public adminstration, and he was
one of the founders of the American Society for Public Administration,
serving as its fourth president. In the 1940s, Gulick famously
defined public administration as POSDCORD: planning, organizing,
staffing, directing, coordinating, reporting and budgeting.
Many years later--in 1990, at the age of 98--he would put
it more simply: ". . . the global content of the field
of public administration is set by the environment, not by
logic; if government does it, it is 'public administration'."

Gulick had previously served the Roosevelt Administration
as a member of the Brownlow Commission on government organization
in 1936-37.

Beginning in June, 1941, I was working in the Treasury organizing
the study of federal, state, and local government fiscal relations.
My colleagues for this project were Harold Groves of Wiscosin, Mabel
Newcomer of Vasser, and Clarence Heer of North Carolina—though
Heer later withdrew from the staff and served only as a special
advisor. The result of our work was published under the title, “Federal,
State and Local Government Fiscal Relations," as Senate Document
69 of the 78th Congress, First Session.

As part of the study, Harold Groves and I came to the conlusion
that federal enactment of a retail sales tax might prove to be a
highly useful revenue producer, and at the same time something of
a brake on the then mounting inflation. We also thought that a federal
enactment would prevent the further spread of state legislation
and that this would mean the possibility of repealing the retail
sales tax at a later point in the economic cycle when counter deflationary
measures might be required. Henry Morganthau showed no interest
in the proosals and repeated all of the regular arguments on the
sales tax ignoring the fiscal policy considerations arising at a
time of high incomes and commodity shortage. I, therefore, discussed
the problem with FDR when he asked me how I was coming with the
Treasury study. He said to go ahead and explore the idea with Harold
Smith, Marriner Eccles, and others.

In the course of this discussion I raised the question of the ultimate
abandonment the pay roll taxes in connection with old age security
and unemployment relief in the event of another period of depression.
I suggested that it had been a mistake to levy these taxes in the
1930’s when the social security program was orgiginally adopted.
FDR said, “I guess you’re right on the economics. They
are politics all the way through. We put those pay roll contributions
there so as to give the contributors a legal, moral, and political
right to collect their pensions and their unemployment benefits.
With those taxes in there, no damn politician can ever scrap my
social security program. Those taxes aren’t a matter of economics,
they’re straight politics.”

FDR also mentioned the psychological effect of contributions in
destroying the “relief attitude.”

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